New York State continues to advance its bulk energy storage deployment efforts, and a final Bulk Storage Implementation Plan is now likely to be made public before the end of April—with procurements set to begin by June 30, 2025.
On Friday, March 21, the Public Service Commission (“PSC”) approved the New York State Energy Research and Development Authority’s (“NYSERDA”) draft Bulk Energy Storage Implementation Plan Proposal (the “NYSERDA Proposal”), which was filed at the PSC in October 2024.
We previously broke down the contents of the NYSERDA Proposal in November 2024, the highlights of which include three solicitations for 1,000 MW of storage capacity (planned to be held in 2025, 2026, and 2027) and the creation of an Index Storage Credit modeled on the extant REC and OREC approaches.
The March 21 Order largely adopts the proposal as-is, but specifies that NYSERDA must include the following components in the final Plan:
Project maturity requirements. Projects of less than 8-hour duration must have an active interconnection request. Projects of 8 or more hours of duration must have a “reasonable pathway to securing an interconnection agreement within the proposed schedule.”
Weighting of price and non-price factors for bid evaluation. Price factors will be weighted 60%, while non-price factors will be weighted 40%, in evaluating bids.
Round-trip efficiency. Round-trip efficiency will be included in the Reference Energy Arbitrage Price on a technology-specific basis: 85% for lithium-ion projects, 65% for non-lithium-ion projects, and 45% for multi-day storage projects.
Definition of “operational.” In the final Plan, NYSERDA must describe with more particularity how a facility’s partial availability will be addressed under the operational requirement with regard to time and capacity.
Duration targets in NYSERDA solicitations. Contrary to NYSERDA’s initial proposal, NYSERDA must allow the participation of resources of 2-hour duration in solicitations, though contracts awarded to such resources may only amount to 10% of the total 3 GW planned procurement capacity. Solicitations shall contain two categories: resources of up to 8-hour duration, and resources of 8+ hour duration. NYSERDA must consider bids from resources of 8+ hour duration that are larger than 200 MW in capacity. If the 20% target for 8+ hour duration is not met in any procurement, remaining procurement volume will be allocated to resources of up to 8-hour duration, and future procurements will be adjusted to solicit more bids from 8+ hour duration resources.
Cap on daily generation of Index Storage Credits (“ISCs”). NYSERDA must cap the total number of ISCs which a resource may receive each day at the number of MWh of an 8-hour resource (i.e. 8 times a resource’s maximum power output), even if the resource is of 8+ hour duration.
Reference Energy Arbitrate Price (“REAP”) calculation methodology. NYSERDA must use its proposed two-category methodology for calculating a resource’s REAP: the TBX methodology for resources of up to 8-hour duration, and the TB8 method for resources of 8+ hour duration. Further, by September 1, 2025, NYSERDA must propose an alternative methodology for calculating estimated expected market revenues for resources of 12+ hour duration.
Limitation of resource liability for ISC payments to NYSERDA. In cases where a resource’s REAP exceeds the strike price for a given month (and the resource would therefore be required to make a payment to NYSERDA), NYSERDA must cap that monthly payment obligation to the negative value of the strike price.
NYPA and LIPA involvement. NYSERDA must work with LIPA to determine an ISC-equivalent credit for bulk storage procured in LIPA’s service territory. The PSC has denied NYPA’s request that the PSC reject NYSERDA’s imposition of additional eligibility requirements for certain NYPA projects, and accepted NYSERDA’s participation and crediting proposal for NYPA.
The PSC has directed NYSERDA to file a revised Plan within 30 days, and to release a Bulk Storage Program Manual at least two weeks before the program is initiated. And, as stated above, NYSERDA will issue its first RFP by June 30, 2025.
